China’s economy yesterday showed further signs of strain with data showing a sharp slowdown in consumer spending and factory production, while investment growth hit a record low as the trade dispute with the US takes its toll.
The readings are the latest to give a headache to leaders in Beijing, who are battling the tariffs row with the US as well as a weak global outlook, while trying to control a mountain of debt at home.
Retail sales, a key gauge of spending by the country’s vast army of consumers, last month grew 7.2 percent year-on-year, down 0.6 percentage points from September and short of expectations, the Chinese National Bureau of Statistics said.
Bureau data showed that industrial production fell to 4.7 percent, from 5.8 percent a month earlier, and fixed-asset investment expanded 5.2 percent in the first 10 months of the year — the lowest recorded since comparable data began being reported in 1998 — instead of the expected 5.4 percent.
China is facing a “complex international economic situation,” with downward pressure on the domestic economy, bureau spokeswoman Liu Aihua (劉愛華) told a news conference.
Analysts have warned of more headwinds for the world’s No. 2 economy, which expanded 6 percent in the third quarter, its worst reading in almost three decades.
“Not only were last month’s data weak, but further weakness lurks ahead,” Capital Economics Ltd economist Martin Lynge Rasmussen said, adding that he expects more monetary easing.
Chinese authorities have unveiled a series of measures to kick-start growth including major tax and rate cuts.
“Worsening growth prospects will likely push Beijing to do more to support growth,” Nomura International chief China economist Lu Ting (陸挺) said.
The latest figures follow data over the weekend showing that factory prices are falling at their fastest pace in three years as orders slow down, while consumer price inflation is only being supported by a surge in the cost of pork owing to an African swine fever epidemic.
“China’s manufacturing sector remained sluggish in October with no immediate respite likely, despite monetary easing measures,” ANZ Research Greater China senior economist Betty Wang (王蕊) said.
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